North Shore Childcare Ltd plans to open a day care centre at the beginning of next year.
Question:
North Shore Childcare Ltd plans to open a day care centre at the beginning of next year. A building has been leased and the company has estimated that the following annual costs will be required.
Based on available space and qualified staff, management believes that the maximum number of children that can be cared for at the day care centre is 120.
Required
(a) Assume that the day care centre can attract 120 children when it opens. Determine the annual fee per child that must be charged to break even financially.
(b) If the company charges \($5980\) per child annually, how many children must be enrolled to break even?
(c) Prepare a CVP graph based on a charge of \($5980\) per child.
(d) If management wants to earn an annual profit of \($62\) 400 from the day care centre and can charge \($5980\) per child, how many children must be enrolled?
(e) If the day care centre can attract 120 children, how much must be charged per child to earn a profit of \($60\) 000?
(f) If the day care centre can attract 120 children, how much must be charged per child to earn a profit of \($60\) 000 plus 15% of annual fees?
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie